Matt Simmons Says Gulf Clean Up Will Cost Over $1 Trillion, Sees BP At $1, Says "We Have Now Killed The GoM"

Matt Simmons shares some startling revelations in his latest Bloomberg TV interview, in which he says none of the propaganda matters on TV 24/7 (photoshopped or not) as the ultimate clean up cost will likely be well over $1 trillion, and a result he is unconcerned about his BP short. He ultimately see the stock going down to $1. What Simmons alleges however is far more startling and audacious: that this is a joint cover up effort between the administration and BP, in which both entities keep throwing sand in the eyes of observers while distracting everyone from the matter at hand: "What we don’t know anything about is the open hole which is caused by
the drill bit when it tossed the blow-out preventer way out of the
hole…and 120,000/day minimum of toxic poison has now covered the floor of
the Gulf of Mexico. So what they’re talking about is the biggest
environmental cover-up ever. And they knew that that well, that riser,
would finally deplete. And then they could say it’s over." On blaming the catastrophe on Transocean: "For two days they kept saying it’s a rig fire. When the rig sank they
could no longer call it a rig fire. It’s a riser leak…Because if they
said the truth they would all go to jail." The conclusion: "Unfortunately, we now have killed the Gulf of Mexico."

On whether the well pressure should be a concern:

“No, it’s a total diversion - that’s the gas condensation that was trapped in the drilling riser which blew off the wellhead at 10:01 PM CT on April 20th, it's a mile-long compressed natural gas."

"What we don’t know anything about is the open hole which is caused by the drill bit when it tossed the blow-out preventer way out of the hole…and 120,000 minimum of toxic poison has now covered the floor of the Gulf of Mexico. So what they’re talking about is the biggest environmental cover-up ever. And they knew that that well, that riser, would finally deplete. And then they could say it’s over. And unfortunately, we now have killed the Gulf of Mexico.”

“Some 5-10 miles away is what the NOIA research vessels have now proved is a deep oil lake that is growing by the day and it’s very toxic oil and its gases are very lethal. Basically if we have a hurricane now, we would have to evacuate the Gulf Coast.”

On the financial implications for BP:“When people find out the magnitude of the story, I don’t know if we can technically clean up the Gulf but it would cost at least a trillion dollars.”

Simmons on his reaction to the rig explosion:

“First of all when I woke up, when my wife turned on the television at 7:00 AM on the 21st and I saw this shocking news, that one of the greatest deepwater rigs ever built by one of the great companies in the industry, Transocean, was in the middle of this terrible fire, and then they said this was a rig fire, this is fuel on the rig, I know that there was 700 gallons of diesel on the rig, I said ‘This is a lie, the Gulf of Mexico is on fire. Why are they saying this?’ For two days they kept saying it’s a rig fire. When the rig sank they could no longer call it a rig fire. It’s a riser leak…Because if they said the truth they would all go to jail.”

On whether the blame lies squarely with BP:

"I think Transocean need Congressional Medals of Hero for this…I am really disgusted. Other than John Hofmeister, the retired president of Shell America, he's the only other person in the industry who I've seen to speak out."

Simmons on why he is shorting BP stock:

“You bet I did. Because I thought BP was going to go under. I’ve been saying that for months and months and when I read that 20 of the 24 Wall Street analysts had a ‘buys,’ I said ‘ That’s ridiculous, I’m going to short them.’ I’ve never shorted a stock in my life before.

"I have patience. The stock will go to one."

“They promised to clean up the Gulf, is that right? Do you know how much it will cost if they can technically do it? Well over a trillion dollars.”

On whether there is hope for a permanent solution now that the oil has stopped leaking:

“No, because that’s not the gusher. That was a little bit of condensation that would have ended anyways. There’s no way to fix the gusher because there’s no casing left in the hole other than doing a small diameter nuclear bomb…It's the only way. With no casing left in the hole, the odds of the relief well working are zero. What the relief wells do-- if they can find the casing, they then cut a 4 inch hole--and then they have something to capture the mud with. With no casing there, it's like pouring oatmeal down a fire hydrant…The casing is not there. It's scattered over the ocean floor. The government now has gamma ray images of the actual blow-out preventer, which is five stories high, weighs 325 tons and it has two sections of casing that pierced through five stories of metal."

Junkers late to the party or what? I'm saying that we shouldn't junk over 19 so we can see the comment and maintain thread integrity since Tyler doesn't allow infinite junks. It would be cool to see 56 junks, or whatever. Instead, POOF!

If they had already tripped the pipe and had run casing for that section of the well and were cementing at the time of the blow out, then why would there be a drill bit (drill bits are attached to drill pipe not casing) in the well that supposedly destroyed the BOPs shear rams on the way out?

Secondly, how could presure build up from condnesate, which is a stable mineral at those pressures, inside a riser which is torn to shreds? If any of the condensate turned to gas it would simply bubble to the surface. Remeber the gas was turning to condensate when it hit the sea water and cooled, clogging the top hats.

The riser is what carries the drilling fluid and cuttings to the surface from the TOP of the well bore and was certainly not 6 inches, try more like 20 or 30 something for a well that deep. A well is drilled in several sections each with a progressively smaller diameter (think telescope). After a section is drilled the pipe must be tripped (taken out of the hole) and casing run down the hole, then cemented before the next section can be drilled or before production completion can be performed. It was during one of the cement jobs at depth when the had a blow out (cement didn't set properly, time or composition could have been factors).

the hole is filled with mud. They trip the drill pipe out of the hole to run the casing. Casing is open on the bottom and fills with the mud, surrounded by the mud. Pump the cement job down the inside of the casing, through the shoe / hole in the bottom, up the back side of the casing. Wait on Cement, Test Cement. Now they run the drill pipe back into the hole to the point where they want to start the seawater displacement. they pump the seawater beginning at 8,000 ft, 3000 ft below mudline. When the seawater goes in, the mud comes out of the casing from that point up to the top. Displacing the mud lowers the weight and the well blows. There is still the drill string in the casing, through the riser, BOP and wellhead, when the well blows and the BOP is shut. Drill pipe is in about 30' sections that are screwed together. those joining points are thicker to compensate for the threads and the weakness they may cause. It could be that there was a thicker coupling in the BOP. Or it could be that there was some casing moved up the hole a few feet that is also in the BOP.

@Noah: Well, I think "full of shit" is a bit overdone. He said from day one that this was a major leak, when BP and the Coast Guard were saying it was only 1,000 barrels and day, then only 5,000 barrels a day. He was right, they were not giving accurate information.

Simmons said that the casing was ejected up the bore hole. BP said that was impossible. Then gamma ray imaging done at the insistence of the US Government showed a section of casing that had been ejected. He was right, BP was not giving accurate information.

Maybe he is wrong about the particulars or the magnitude of this supposed "oil lake" and I hope he is. But his track record is better than BP's so far.

So there ain't no oil on your beach, Archie?? I guess that means there was no disaster either? Problem solved <dusts hands>.

But just in case we weren't all imagining startling footage of pelicans suffocating under a viscous coat of Quaker State, can you tell us exactly what did happen? Think millions of gallons of Correxit sprayed liberally into the gusher may have done something to conceal the true nature of this disaster, er, small environmental hiccup? Kinda like Vietnam was just a police action.

denari, you are exactly right. Plus, they have captured most of the leaked oil. But, as you can see, there are a lot oil haters out there who WANT to believe that this is a catastrophe when it isn't. I've run an estimate and based on what they've spent so far, this will not cost BP more than $20 billion and probably more like $15.

I was reading the comments on the dollar estimates and was wondering how much oil are we talking about. While I can't comment on the dollars, it was helpful for me to get an idea of how much oil we were talking about so here it goes (I did the computations in Word and Excel so I'm not sure why the weird coding langauge before my numbers):

NY Times on June 10th had experts estimating 25k-30k of oil spewing a day.I haven’t followed closely so I’ll use the June 10th figure to see how much has spilled.Blast happened on April 20th.That’s 50 days between the two dates.From the experts estimates that’s anywhere between 1.25 million to 1.5 million barrels.According to EIA.gov there’s 42 gallons of oil in a barrel. We all know what a gallon of milk looks like. So that’s anywhere from 52.5 million to 63million gallons of oil according to experts or 1.26 million gallons a day.And I’m sure my June 10th date is inaccurate. According to the EPA and Encyclopedia Britannica there are 643 quadrillion gallons of water in the Gulf. This oil by my lowballed estimates is 000000008% of the Gulf's total volume. Now is that over $20 billion dollars worth of damages. I have no idea, but shit...that's a lot of gallons of oil. But then again the Gulf is a lot more of gallons of water.